Gabelli runs many closed end funds (CEFs) and since they must maintain a 200% coverage ratio on senior securities (mainly preferred stock) it is nice to occasionally glance at their coverage.
Gabelli makes it easy on us all–they post the leverage each month.
Click here is see the coverages for the period ending 9/30/2022.
Note that the Gabelli Multimedia Trust (GGT) which has 2 exchange traded preferred issues outstanding is at 200% as of September 30th–let’s watch and see how they handle this situation.
Caution–not all the preferreds shown for the various funds have exchange traded preferreds–some has been sold in private transactions and are not exchange traded.
Gabelli Multimedia Trust (GGT) probably will have a rights offering soon at a discount to price to add liquidity and drop the ratio under 200% coverage. Its NAV will drop but right the ship. My 2-cents
Coverage = Total Net Assets / Preferred Assets
Question: Does Total Net Assets include Preferred Assets?
TEF,
Total Net Assets = Common Assets + Preferred (Fixed Rate and ARPA)
Coverage = Total Net Assets/Total Preferred Assets
To better understand this – try the math on Tim’s attached Gabelli’s report. Easy once you see it.